Laxmi Organic's logistics costs double as Dahej Phase 2 timeline slips
Sequential growth of 10% couldn't offset a 6% annual revenue drop, as management remains cautious on forward guidance.
What's new
- Q4 revenue rose 9-10% sequentially after a 6% year-on-year decline.
- Dahej Phase 2 chemical charging begins in Q1 FY27, with revenue expected in H2.
- Management withheld FY27 and FY28 guidance, citing market uncertainty.
Why it matters
Laxmi Organic is managing a high-cost environment where logistics expenses have doubled since March. The lack of revenue guidance for the next two years suggests management sees no near-term clarity in the chemical pricing environment.
What we're watching
- The transition of Dahej Phase 2 from chemical charging to revenue generation.
- Acetic acid price stability after recent volatility between $450 and $700 per tonne.
- Integration of the new CFO into the company's fiscal planning.
The full read
Laxmi Organic finished the year with a sequential revenue lift of 9-10%, yet the full-year picture shows a 6% contraction compared to the previous year. While the specialty chemicals segment shows signs of recovery, the external environment remains taxing. Logistics costs have doubled since March due to Middle East conflict, and acetic acid prices remain erratic, having swung from above $700 per tonne down to the current $450-470 range. The Dahej Phase 2 plant starts chemical charging this quarter, with management projecting revenue contributions beginning in the second half of the year. Beyond that, the outlook turns opaque. Management declined to offer revenue targets for FY27 or FY28, citing the unpredictable nature of global chemical markets. Investors are left to gauge whether the upcoming capacity expansion can outpace the volatility of input prices and shipping costs.